Collateral is one of the most important features of a debt contract. A substantial theoretical literature motivates the use of collateral as a means to alleviate ex-ante and ex-post information asymmetries between borrowers and lenders and the incidence of credit rationing. Through its seniority...

We provide the first evidence on how the introduction of information sharing via a public credit registry affects banks’ lending decisions. We employ a unique dataset containing detailed information on credit card applications and decisions from one of the leading banks in China. While we do...

We use Japanese microdata to examine how financial market frictions affect foreign direct investment (FDI). The Japanese land price bubble and banking trouble in the late 1980s and early 1990s serve as a quasi natural experiment to identify two possible transmission channels from financial...

Post debt relief, the number of African countries considering accessing international capital markets, often to fund large infrastructure projects, is increasing. Potential risks of capital inflows are well known but the literature offers little help to estimate the cost of borrowing...

Strong growth in investment made a key contribution to the economic recovery in Argentina earlier this decade. The paper uses firm-level data to assess changes in financing constraints and the linkages between real investment at the firm level and macroeconomic developments in the real exchange...

We provide new micro evidence on the discussion about the relationship between financial development and welfare. Relying on the concept of local financial development our analysis focuses on three dimensions of household welfare: vulnerability to poverty, investment, and consumption smoothing....

This paper presents an additional credit channel for monetary policy that would arise in the presence of credit rationing. I formally examine a situation in which new entry firms have no choice but to borrow funds from a financial intermediary to cover entry costs, taking into account the fact...

The authors provide new microevidence on the relationship between financial development and welfare. Relying on the concept of local financial development, their analysis focuses on two dimensions of household welfare: investment and consumption. The results show that financial development is...